As filed with the Securities and Exchange Commission on March 23, 2005
Registration No. 333-63924
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
POST-EFFECTIVE AMENDMENT NO. 3
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
Merrill Lynch Canada Inc.
Initial Depositor and Securities Act Issuer
(Exact name of registrant as specified in charter)
CP HOLDRS(SM) Deposit Facility
[Issuer with respect to the receipts]
Canada 6211 Not Applicable
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Identification
organization) Code Number) Number)
BCE Place, Suite 400
181 Bay Street
Toronto, Ontario M5J2V8
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Andrea L. Dulberg
Corporate Secretary
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
New York, NY 10281
(212) 449-1000
(Name, address, including zip code and telephone number, including area code,
of agent for service)
__________________________
Copies to:
Andrew B. Janszky, Esq. Karen A. Malatest, Esq.
Shearman & Sterling LLP Torys LLP
599 Lexington Avenue Suite 3000, Maritime Life Tower
New York, New York 10022 79 Wellington Street West
(212) 848-4000 Box 270, TD Centre
Toronto, Ontario
M5K IN2
(412) 865-7303
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. / /
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PROSPECTUS
- ----------
CP HOLDRS(SM) Deposit Facility
HOLding Company Depositary ReceiptS(SM)
For Shares of Common Stock of the Successor Companies to
Canadian Pacific Limited
The CP HOLDRS(SM) Deposit Facility issues depositary receipts called CP
HOLDRS(SM) that currently represent your undivided beneficial ownership in the
deposited shares of common stock of the companies into which Canadian Pacific
Limited was split in October 2001, and their successors. CP HOLDRS are separate
from the underlying deposited shares of common stock of the companies that are
represented by CP HOLDRS. For a list of the names and the number of shares of
common stock of the companies that make up a CP HOLDR, see "Highlights of CP
HOLDRS--What is the current composition CP HOLDRS?" starting on page 8 of this
prospectus. BNY Trust Company of Canada, a Canadian trust company, acts as
depositary. The CP HOLDRS Deposit Facility issues CP HOLDRS on a continuous
basis.
Investing in CP HOLDRS involves significant risks. See "Risk Factors"
starting on page 4.
Merrill Lynch Canada Inc., as initial depositor, deposited 2,500 shares
of the common stock of Canadian Pacific Limited with the depositary in
connection with the initial issuance of CP HOLDRS. As initial depositor, Merrill
Lynch Canada Inc. is deemed the "issuer" of CP HOLDRS under the federal
securities laws of the United States.
If you wish to create CP HOLDRS by delivering to the depositary the
requisite securities represented in CP HOLDRS, the depositary will charge you an
issuance fee of up to US$0.10 per CP HOLDR, rounded up to the nearest 100. See
"Description of the Deposit Agreement--Fees and Expenses."
CP HOLDRS are neither interests in nor obligations of Merrill Lynch
Canada Inc. CP HOLDRS are not interests in BNY Trust Company of Canada, as
depositary. Please see "Description of the Deposit Agreement" in this prospectus
for a more complete description of the duties and responsibilities of the
depositary, including the obligation of the depositary to act without negligence
or bad faith.
CP HOLDRS are listed on the Toronto Stock Exchange and the New York
Stock Exchange, in each case under the symbol "HCH". On March 1, 2005, the last
reported sale price of a CP HOLDR on the Toronto Stock Exchange was 112.65
Canadian dollars ("C$") and the last reported sale price of a CP HOLDR on the
New York Stock Exchange was 90.41 U.S. dollars ("US$").
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
__________________________
The date of this prospectus is March 23, 2005
"HOLDRS" and "HOLding Company Depositary ReceiptS" are service marks of
Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Page
----
Summary.......................................................................3
Risk Factors..................................................................4
Highlights of CP HOLDRS.......................................................7
Description of CP HOLDRS.....................................................14
Description of The Underlying Securities.....................................15
Description of The Deposit Agreement.........................................17
Right to Underlying Securities..........................................17
Initial Depositor.......................................................17
Depositary..............................................................17
Fees and Expenses.......................................................18
Issuer Reports and Voting of Underlying Securities......................19
Distributions...........................................................19
Rights Offerings........................................................20
Offer for Underlying Securities.........................................20
Reconstitution Events...................................................20
Surrender of CP HOLDRS..................................................21
Suspension of Delivery, Transfers or Surrenders.........................22
Liability for Taxes and Other Charges...................................22
Warranties and Authorization............................................22
Prevention or Delay in Performance......................................23
Resignation or Removal of Depositary....................................23
Amendments to the Deposit Agreement.....................................23
Termination of Deposit Agreement........................................23
Book Entry System.......................................................24
Plan of Distribution.........................................................27
United States Federal Income Tax Consequences................................28
ERISA Considerations.........................................................32
Legal Matters................................................................32
Depositary...................................................................32
Where You Can Find More Information..........................................32
_________________
This prospectus contains information you should consider when making
your investment decision with respect to CP HOLDRS. With respect to information
about CP HOLDRS, you should rely only on the information contained in this
prospectus. Neither the depositary nor Merrill Lynch Canada Inc. has authorized
any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it.
Neither the depositary nor Merrill Lynch Canada Inc. is making an offer to sell
CP HOLDRS in any jurisdiction where the offer or sale is not permitted.
2
SUMMARY
CP HOLDRS are issued by the CP HOLDRS Deposit Facility which was
created by the deposit agreement, dated as of September 4, 2001, among BNY Trust
Company of Canada, as depositary, Merrill Lynch Canada Inc., as initial
depositor and coordinator, the owners and beneficial owners from time to time of
CP HOLDRS and depositors from time to time of the underlying securities. The
deposit agreement governs the terms of CP HOLDRS. The CP HOLDRS Deposit Facility
is not a registered investment company under the United States Investment
Company Act of 1940.
The depositary holds shares of common stock issued by the companies
into which Canadian Pacific Limited was split in October 2001, and their
successors, referred to collectively in this prospectus as the successor
companies. As specified in the deposit agreement, CP HOLDRS are obligations of
BNY Trust Company of Canada, as depositary. The depositary has agreed to perform
all of the obligations of the depositary specifically set forth in the deposit
agreement without negligence or bad faith. The number of shares of each
successor company's common stock currently held by the depositary with respect
to each round-lot of 100 CP HOLDRS is specified under "Highlights of CP
HOLDRS--What is the current composition of CP HOLDRS?" The shares of common
stock of these successor companies that are held under the deposit agreement at
any point in time (together with any other securities, cash or other property
that may be held under the deposit agreement in the future) are collectively
referred to in this prospectus as the underlying securities. There are currently
five companies represented in CP HOLDRS, which may change as a result of
reconstitution events, distributions of securities by issuers of the underlying
securities or other events. The underlying securities may only be represented in
CP HOLDRS if they are registered under Section 12 of the Securities Exchange Act
of 1934, are issued by a reporting issuer under Canadian securities laws and if
they are listed for trading on a national securities exchange in Canada and
either on a U.S. national securities exchange or the Nasdaq National Market
System. For a brief description of the business of each of the companies
represented in CP HOLDRS and historic monthly pricing information of these
companies, see "Annex A".
CP HOLDRS represent your undivided beneficial ownership interest in the
underlying securities that are held by the depositary on your behalf. CP HOLDRS
are separate from the underlying securities that are represented in CP HOLDRS.
On March 1, 2005, there were 2,052,053 CP HOLDRS outstanding.
Merrill Lynch Canada Inc., the depositary and their respective
affiliates are not affiliated with the issuers of the underlying securities, and
the issuers of the underlying securities have no obligations with respect to CP
HOLDRS. This prospectus relates only to CP HOLDRS and does not relate to the
other securities of the issuers of the underlying securities. We have not
participated in the preparation of these documents or made any due diligence
inquiries with respect to the issuers of the underlying securities in connection
with CP HOLDRS. We make no representation that the publicly available documents
of or any other publicly available information regarding the issuers of the
underlying securities are accurate or complete. Furthermore, we cannot assure
you that all events occurring prior to the date of this prospectus, including
events that would affect the accuracy or completeness of the publicly available
documents described in the preceding paragraph, that would affect the trading
price of the securities of the issuers of the underlying securities and
therefore, the offering and trading prices of CP HOLDRS, have been publicly
disclosed.
3
RISK FACTORS
An investment in CP HOLDRS involves risks similar to investing in each
of the underlying securities outside of CP HOLDRS.
General Risk Factors
o Loss of investment. Because the value of CP HOLDRS directly relates to
the value of the underlying securities, you may lose a substantial
portion of your investment in CP HOLDRS if the underlying securities
decline in value.
o Discount trading price. CP HOLDRS may trade at a discount to the
aggregate value of the underlying securities, in which case, if
holders of CP HOLDRS wish to realize the dollar value of the
underlying securities, they will have to surrender their CP HOLDRS
(and pay any applicable fees and expenses) and receive the underlying
securities.
o Ownership of only fractional shares in the underlying securities. As a
result of distributions of securities by companies represented in CP
HOLDRS or other corporate events such as mergers, your CP HOLDRS may
represent an interest in a fraction of a share in one or more of the
companies represented in CP HOLDRS. Currently, if you own less than
six CP HOLDRS, your CP HOLDRS represent only a fraction of a share of
one of the companies represented in CP HOLDRS. As such, you will only
be entitled to voting, distribution and other beneficial ownership
rights in the underlying securities in which you own only fractional
shares to the extent that the depositary aggregates your fractional
shares with the other shares of such underlying securities and passes
on beneficial ownership rights, including distribution and voting
rights, to you based on your proportional, fractional shares in the
underlying securities. In addition, if you surrender your CP HOLDRS
and pay the applicable fees to receive the underlying securities, you
will receive cash in lieu of your fractional shares. You will not be
entitled to any securities if your interest in an underlying security
is only a fraction of a share.
o No investigation of underlying securities. Currently, the underlying
securities represented in CP HOLDRS are the common stocks of the
companies into which Canadian Pacific Limited was split in October
2001 and their successors. CP HOLDRS were designed without regard for
the value, price performance, volatility or investment merit of
Canadian Pacific historically or the successor companies
prospectively. Consequently, the depositary, Merrill Lynch Canada Inc.
and each of their respective affiliates have not performed any
investigation or review of the successor companies, including their
public filings. Investors and market participants should not conclude
that the creation of CP HOLDRS is any form of investment
recommendation by the depositary, Merrill Lynch Canada Inc. or their
respective affiliates.
o Concentration of investment. CP HOLDRS represents an investment in the
businesses of each of the successor companies and, as such, is a
concentrated investment. As a result, owning CP HOLDRS exposes you to
the risks of concentrated investments. In addition, as a result of
market fluctuations and/or reconstitution events, an investment in CP
HOLDRS may come to represent a more concentrated investment in one or
more of the underlying securities. See "Description of the Deposit
Agreement--Reconstitution Events."
o Conflicting investment choices. In order to sell one or more of the
underlying securities individually or to participate in a tender offer
or take-over bid relating to one or more of the underlying securities,
you will be required to surrender your CP HOLDRS and receive delivery
of each of the underlying securities. The surrender of your CP HOLDRS
will allow you to sell individual underlying securities or to deliver
individual underlying securities in a tender offer or take-over bid.
The surrender of CP HOLDRS will involve payment of a cancellation fee
to the depositary of up to US$0.10 per CP HOLDR cancelled. The
cancellation fee will be calculated by rounding up the number of CP
HOLDRS surrendered to the nearest 100.
4
o Trading halts. Trading in CP HOLDRS on the Toronto Stock Exchange or
the New York Stock Exchange may be halted if trading in one or more of
the underlying securities is halted. Trading in CP HOLDRS may be
halted even if trading continues in some or all of the underlying
securities. If trading is halted in CP HOLDRS, you will not be able to
trade CP HOLDRS and you will only be able to trade the underlying
securities if you cancel your CP HOLDRS (and pay the applicable fees
and expenses) and receive each of the underlying securities.
o Delisting from the Toronto Stock Exchange and the New York Stock
Exchange. If CP HOLDRS falls below any of the respective continued
listing criteria, the Toronto Stock Exchange or the New York Stock
Exchange may consider delisting CP HOLDRS. If CP HOLDRS are delisted
by the Toronto Stock Exchange or the New York Stock Exchange, a
termination event will result unless CP HOLDRS are listed for trading
on another national securities exchange in Canada and either a
national securities exchange in the United States or the Nasdaq
National Market System within five business days of their delisting.
Possible events that could lead to a delisting include:
o inadequate number of publicly-held CP HOLDRS;
o inadequate number of holders; and
o inadequate market value of CP HOLDRS outstanding.
o Possible conflicts of interest. Merrill Lynch Canada Inc., as initial
depositor and coordinator, may face possible conflicts of interest in
connection with its activities. For example, Merrill Lynch Canada Inc.
and its affiliates, collectively referred to as Merrill Lynch, may
engage in investment banking and other activities on behalf of the
issuers of the underlying securities, may provide services to issuers
of the underlying securities in connection with their business, or may
make purchases or sales, including establishing long or short
positions, in the underlying securities for their own accounts. The
potential profit of Merrill Lynch also is affected by any hedging
activities in which it may engage in connection with its proprietary
trading activity in the underlying securities or CP HOLDRS. All of
these activities may result in conflicts of interest with respect to
the financial interest of Merrill Lynch, on the one hand, and, on the
other hand, Merrill Lynch Canada Inc.'s activity as initial depositor
and coordinator in connection with CP HOLDRS.
o Delays in distributions. The deposit agreement provides that the
depositary will use its reasonable efforts to distribute any cash or
other distributions paid in respect of the underlying securities to
you as soon as practicable after receipt of such distribution.
However, you may receive such cash or other distributions later than
you would if you owned the underlying securities outside of CP HOLDRS.
In addition, you will not be entitled to any interest on any
distribution by reason of any delay in distribution by the depositary.
Risk Factors Specific to Merrill Lynch Canada Inc. and the Depositary as Foreign
Persons
o Because Merrill Lynch Canada Inc. and the depositary are Canadian
companies; there may be limitations on the enforcement of certain
civil liabilities and judgments obtained in the United States against
them. Merrill Lynch Canada Inc. and the depositary are incorporated
under the laws of Canada and all of their assets are located outside
of the United States. Most of their directors and officers are
residents of Canada. Although Merrill Lynch Canada Inc. has appointed
Merrill Lynch, Pierce Fenner & Smith Incorporated as agent for service
of process in the United States and therefore you will be able to
effect service of process on Merrill Lynch Canada Inc. in the United
States, it may be difficult for a holder of CP HOLDRS to effect
service of process within the United States against the depositary and
Merrill Lynch Canada Inc.'s and the depositary's respective directors
and officers, or to enforce in the United States judgments that are
obtained in a U.S. court against these non-U.S. persons. There is also
doubt as to the enforceability in Canada by a court in original
actions, or in actions to enforce judgments of U.S. courts, of civil
liberties predicated upon U.S. federal securities laws. The Canadian
courts may enforce foreign judgments for liquidated amounts in civil
matters, subject to certain conditions and exceptions.
5
Risk Factors Specific to the Successor Companies
o The stock prices of the successor companies represented in CP HOLDRS
may be volatile. The successor companies currently represented in CP
HOLDRS operate in three main areas of business: energy, transportation
and hotels. The financial condition and results of operations of these
companies are subject to a variety of factors, including:
o general market fluctuations;
o the seasonality of various markets for principal business lines;
o interest rate and currency fluctuations;
o general political and economic conditions in the U.S., Canada and
throughout the world;
o changes in financial estimates by securities analysts;
o legal or regulatory developments affecting the successor
companies;
o announcements by competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments;
o departures of key personnel; and
o sales of securities of the successor companies in the open
market.
The stock price of the successor companies could be subject to wide
fluctuations in response to these factors, among others.
6
HIGHLIGHTS OF CP HOLDRS
The following is only a summary of CP HOLDRS and is qualified by the
more detailed information appearing elsewhere in this prospectus. You should
read the entire prospectus carefully and not rely solely on the summary
information.
What are CP HOLDRS? CP HOLDRS are exchange-traded instruments that currently represent
ownership of the shares of common stock of the successor companies.
What happened to Canadian Pacific? Pursuant to a plan of reorganization, in October 2001, Canadian
Pacific split into five separate public companies--PanCanadian
Petroleum Limited, Canadian Pacific Railway Company, Fording Inc.,
CP Ships Holdings Inc. and Fairmont Hotels & Resorts, Inc.
PanCanadian Petroleum Limited amalgamated with PanCanadian Energy
Corporation on January 2, 2002, subsequently merged with Alberta
Energy Company Ltd. on April 5, 2002, and changed its name to
EnCana Corp. These companies, or their successors, are currently
represented by CP HOLDRS.
What are the advantages of CP HOLDRS? CP HOLDRS allow you to hold a single security representing an
investment in the successor companies. CP HOLDRS help reduce the
inconvenience of owning shares of the successor companies and
reduce the expenses associated with buying and selling shares of
each of the successor companies in a traditional brokerage account
with transaction-based charges.
How can you acquire CP HOLDRS? You may acquire CP HOLDRS in two ways:
o through a cash purchase of CP HOLDRS in the secondary
trading market; or
o by creating CP HOLDRS.
To create CP HOLDRS, you must deposit the underlying securities
then represented by a CP HOLDR with the depositary and pay an
issuance fee.
The depositary may require a minimum deposit of underlying
securities so that the depositary will receive only whole share
amounts for issuance of CP HOLDRS. As a result, based on the
current composition of CP HOLDRS, the depositary may require you
to deposit the quantity and classes of securities in an amount to
create integral multiples of 500 CP HOLDRS so that your beneficial
ownership of the underlying securities will be represented in only
whole share amounts. You will not receive physical certificates
evidencing your ownership of CP HOLDRS. See "Description of the
Deposit Agreement--Book Entry System."
Who was the initial depositor and coordinator In connection with the initial issuance of CP HOLDRS, Merrill
and what was its role? Lynch Canada Inc. acted as initial depositor and coordinator for
holders of shares of common stock of Canadian Pacific Limited,
referred to in this prospectus as CP Shares. As coordinator,
Merrill Lynch Canada Inc. was responsible for working with the
depositary to facilitate the creation of CP HOLDRS, worked with
broker-dealers to solicit deposits of CP Shares by beneficial
owners of CP Shares and established with the depositary the
process by which CP HOLDRS were delivered and the terms under
which CP HOLDRS are governed. Merrill Lynch Canada Inc. paid
7
approximately US$2.25 million in depositary, legal, printing and
registration expenses relating to the establishment of CP HOLDRS.
The coordinator also received a coordination fee of approximately
C$1.25 million in connection with its activities as coordinator.
As initial depositor, Merrill Lynch Canada Inc. deposited 2,500 CP
Shares, as required by the deposit agreement.
Who is the depositary and what is its role? BNY Trust Company of Canada, a Canadian trust company, acts as
depositary under the deposit agreement. The depositary is
responsible for receiving deposits of underlying securities and
delivering CP HOLDRS representing the underlying securities issued
by the CP HOLDRS Deposit Facility created by the deposit
agreement. The depositary delivers CP HOLDRS on a continuous
basis. The depositary receives compensation as set forth in the
deposit agreement. The depositary holds the underlying securities
on behalf of the holders of CP HOLDRS.
How do CP HOLDRS trade? CP HOLDRS are listed on the Toronto Stock Exchange and the New
York Stock Exchange. The minimum trading unit to trade CP HOLDRS
on such stock exchanges is one CP HOLDR. On March 1, 2005 the
last reported sale price of a CP HOLDR on the Toronto Stock
Exchange was C$112.65 and the last reported sale price of a CP
HOLDR on the New York Stock Exchange was US$90.41.
What is the current composition of CP HOLDRS? The following chart provides:
o the names of the successor companies whose underlying
securities are currently represented by a CP HOLDR;
o the stock ticker symbols;
o the share amounts of the successor companies currently
represented by a round-lot of 100 CP HOLDRS; and
o the principal markets on which the underlying securities
of the successor companies trade.
Share Primary Trading
Name of Company Ticker Amounts Markets
--------------- ------ ------- -------
EnCana Corp. ECA 68.4 NYSE, TSX
Fording Canadian Coal
Trust FDG 16.6 NYSE, TSX
CP Ships Limited TEU 25 NYSE, TSX
Canadian Pacific CP 50 NYSE, TSX
Railway Company
Fairmont Hotels and FHR 25 NYSE, TSX
Resorts Inc.
What are reconstitution events? Underlying securities will be distributed from CP HOLDRS in the
following circumstances:
o any class of underlying securities ceases to be
outstanding as a result of a merger or other corporate
combination of an issuer of underlying securities and
securities received by the depositary in exchange for such
underlying securities are not registered under Section 12 of
the Exchange Act, issued by a reporting issuer under Canadian
securities laws and are not listed for trading on a national
securities exchange in Canada and on either a national
securities exchange in the United
8
States or the Nasdaq National Market System;
o any class of underlying securities is delisted from
trading on its primary exchange or market in either the
United States or Canada and is not listed for trading on
another national securities exchange in Canada or on either a
national securities exchange in the United States or the
Nasdaq National Market System, as the case may be, within
five business days of such delisting;
o either any class of underlying securities is no longer
registered under Section 12 of the Exchange Act or an issuer
of underlying securities is no longer a reporting issuer
under Canadian securities laws;
o the United States Securities and Exchange Commission
determines that an issuer of underlying securities is an
investment company under the United States Investment Company
Act of 1940 and the depositary has actual acknowledge of such
determination; or
o any other change in nominal value, change in par value,
split-up, consolidation or any other reclassification of
underlying securities in connection with which the depositary
receives securities that are not registered under Section 12
of the Exchange Act, issued by a reporting issuer under
Canadian securities laws and not listed on a national
securities exchange in Canada and either a national
securities exchange in the United States or the Nasdaq
National Market System.
What are termination events? The depositary will terminate the deposit agreement in the
following circumstances:
o CP HOLDRS are no longer listed on a national securities
exchange in Canada and either a national securities exchange
in the United States or the Nasdaq National Market System, as
the case may be, and are not approved for listing on another
national securities exchange in Canada and either a national
securities exchange in the United States or the Nasdaq
National Market System, as the case may be, within five
business days of their delisting;
o 60 days have passed after the depositary has delivered to
Merrill Lynch Canada Inc. a written notice of its election to
resign and no successor has been appointed; or
o 75% of the owners of outstanding CP HOLDRS, other than
Merrill Lynch Canada Inc. and its affiliates, notify the
depositary that they elect to terminate the deposit agreement.
Upon termination of the deposit agreement and prior to
distributing the underlying securities to you, the depositary will
charge you a cancellation fee of up to US$0.10 per CP HOLDR
surrendered, along with any taxes or other governmental charges,
if any. The cancellation fee will be calculated by rounding up
the number of CP HOLDRS surrendered to the nearest 100.
9
How much will it cost to create a CP HOLDR? The following is a summary of the fees payable in connection with
Are there any other fees CP HOLDRS (per CP HOLDR):
associated with CP HOLDRS?
To create CP HOLDRS by delivering the requisite underlying
securities:
Issuance Fee US$0.10
(payable to the depositary)
Ongoing Fees:
Annual Fee US$0.015
(payable to the depositary)
To cancel CP HOLDRS and receive the underlying securities:
Cancellation Fee US$0.10
(payable to the depositary)
Because the fee you will pay to create CP HOLDRS will be
calculated by rounding up the number of CP HOLDRS created to the
nearest 100, the fee to create between one and 100 CP HOLDRS is
US$10.00. However, the depositary may require a minimum deposit
of underlying securities so that the depositary will receive only
whole share amounts for issuance of CP HOLDRS. As a result, based
on the current composition of CP HOLDRS, the depositary may
require you to deposit the quantity and classes of underlying
securities in an amount to create integral multiples of 500 CP
HOLDRS so that your beneficial ownership of underlying securities
will be represented in only whole share amounts. This means you
may be required to pay an issuance fee to the depositary of
US$50.00 in order to create each integral multiple of 500 CP
HOLDRS, if the depositary charges you the maximum issuance fee of
US$0.10 per CP HOLDR created.
The fees payable to the depositary indicated above are the maximum
amount of the fees that may be charged (except that the amount of
the issuance and cancellation fees will be calculated by rounding
up the number of CP HOLDRS to the nearest 100). Because the
issuance and cancellation fees will be calculated by rounding up
the number of CP HOLDRS to the nearest 100, the fee to create and
cancel between one and 100 CP HOLDRS could be as much as US$10.00,
if the depositary charges you the maximum US$0.10 fee per CP
HOLDR. The issuance fee to be paid for the issuance of CP HOLDRS
and the cancellation fee payable to surrender CP HOLDRS and
receive the underlying securities are set at the discretion of the
depositary and may be less than US$0.10 per CP HOLDR. In
addition, the annual fee payable to the depositary will be
deducted from the cash distributions made on the underlying
securities held by the depositary under the deposit agreement. If
cash distributions are not sufficient to pay the annual fee, the
depositary will waive that portion of the annual fee in the
calendar year in which the annual fee exceeds the total cash
distributions.
If the depositary incurs any expenses in connection with any
distribution (e.g., any expense in connection with converting cash
distributions into United States dollars for United States
residents or expenses in connection with distributing securities
or other property), the depositary will deduct these expenses
prior to making the distribution.
10
If you choose to sell your CP HOLDRS on the Toronto Stock Exchange
or the New York Stock Exchange, you should not be charged any fees
other than standard commissions and other fees charged by your
broker to execute trades on your behalf.
If you choose to pay the cancellation fee or issuance fee to the
depositary in Canadian dollars or if the depositary collects the
annual fee in Canadian dollars, the fee will equal the product of
the relevant U.S. dollar fee and the last published Bank of Canada
daily noon rate for Canadian dollars on the date on which the fee
is payable.
What are the U.S. federal income tax We have received a tax opinion from Shearman & Sterling LLP,
consequences of CP HOLDRS? special U.S. tax counsel to Merrill Lynch Canada Inc., stating
that owners of CP HOLDRS will be treated for U.S. federal income
tax purposes as the owners of the underlying securities
represented by CP HOLDRS. Therefore, you will not be subject to
any additional U.S. federal income taxes as a result of holding CP
HOLDRS instead of the underlying securities outside CP HOLDRS.
What are the voting and other ownership rights? CP HOLDRS represent your beneficial ownership of the underlying
securities. Owners of CP HOLDRS have the same rights and
privileges as they would have if they owned the underlying
securities beneficially outside of CP HOLDRS. These include the
right to instruct the depositary to vote the underlying
securities, to receive any dividends and other distributions on
the underlying securities that are declared and paid to the
depositary by an issuer of an underlying security, the right to
pledge CP HOLDRS and the right to surrender CP HOLDRS to receive
the underlying securities. CP HOLDRS do not change your
beneficial ownership in the underlying securities under United
States federal securities laws, including sections 13(d) and 16(a)
of the Securities Exchange Act of 1934, as amended, referred to
herein as the Exchange Act. As a result, you will have the same
obligations to file insider trading reports that you would have if
you held the underlying securities outside of CP HOLDRS. However,
due to the nature of CP HOLDRS, you will not be able to
participate in any dividend reinvestment program of an issuer of
underlying securities unless you cancel your CP HOLDRS (and pay
the applicable fees) and receive all of the underlying securities.
A holder of CP HOLDRS is not a registered owner of the underlying
securities. In order to become a registered owner, a holder of CP
HOLDRS would need to surrender their CP HOLDRS, pay the applicable
fees and expenses, receive all of their underlying securities and
follow the procedures established by the issuers of the underlying
securities for registering their securities in the name of such
holder. Under Canadian law, only a registered holder of
securities is entitled to exercise their right of dissent and have
the value of their securities appraised.
You will retain the right to receive any reports and
communications that the issuers of underlying securities are
required to send to beneficial owners of their securities. As
such, you will receive such reports and communications from the
broker through which you hold your CP HOLDRS in the same manner as
if you beneficially owned your underlying securities outside of CP
HOLDRS in "street name" through a brokerage account. The
11
depositary will not attempt to exercise the right to vote that
attaches to, or give a proxy with respect to, the underlying
securities other than in accordance with your instructions.
The deposit agreement entitles you to receive, subject to certain
limitations and net of any fees and expenses of the depositary,
any distributions of cash (including dividends), securities or
property made with respect to the underlying securities. However,
any distribution of securities by an issuer of underlying
securities will be retained by the depositary and will become part
of the underlying securities if the securities are registered
under Section 12 of the Exchange Act, are issued by a reporting
issuer under Canadian securities laws and are listed on a national
securities exchange in Canada and on either a national securities
exchange in the United States or through the Nasdaq National
Market System.
You may elect to receive dividends with respect to the underlying
securities in either Canadian or U.S. dollars by following the
procedures established by your broker through which you hold your
CP HOLDRS.
There may be a delay between the time any cash or other
distribution is received by the depositary with respect to the
underlying securities and the time such cash or other
distributions are distributed to you. In addition, you will not
be entitled to any interest on any distribution by reason of any
delay in distribution by the depositary. If any tax or other
governmental charge becomes due with respect to CP HOLDRS or any
underlying securities, you will be responsible for paying that tax
or governmental charge.
If you wish to participate in a tender offer or take-over bid for
any of the underlying securities, or any form of stock repurchase
program by an issuer of an underlying security, you must surrender
your CP HOLDRS (and pay the applicable fees and expenses) and
receive all of your underlying securities in exchange for your CP
HOLDRS. For specific information about obtaining your underlying
securities, you should read the discussion under the caption
"Description of the Deposit Agreement--Surrender of CP HOLDRS."
What ownership rights do you have in A CP HOLDR currently represents and in the future will likely
fractional shares in the underlying securities? represent fractional shares of some or all of the successor
companies represented in CP HOLDRS. You are entitled to receive
distributions proportionate to your fractional shares.
In addition, you are entitled to receive proxy materials and other
shareholder communications and you are entitled to exercise voting
rights proportionate to your fractional shares. The depositary
will aggregate the votes of all of the share fractions represented
by CP HOLDRS and will vote the largest possible number of whole
shares. If, after aggregation, there is a fractional remainder,
this fraction will be ignored, because the issuer will only
recognize whole share votes. For example, if 100,001 CP HOLDRS
are outstanding and each CP HOLDR represents 1.75 shares of an
underlying security, there will be 175,001.75 votes of the
underlying security represented by CP HOLDRS. If 50,000 holders
of such CP HOLDRS vote their underlying securities "yes" and
50,001 vote "no", there will be 87,500 affirmative votes and
12
87,501.75 negative votes. The depositary will ignore the .75
negative vote and will deliver to the issuer 87,500 affirmative
votes and 87,501 negative votes.
What are some of the other considerations CP HOLDRS currently represent your beneficial ownership of shares
associated with CP HOLDRS? of the successor companies. CP HOLDRS do not provide protection
with respect to the risks associated with owning the shares of the
successor companies outside of CP HOLDRS.
If the shares of one or more of the successor companies are not
listed on a stock exchange or in other circumstances, it may be
necessary to exclude the shares of these successor companies from
CP HOLDRS and distribute these shares directly to you or even to
delist CP HOLDRS. See "Description of the Deposit
Agreement--Reconstitution Events."
13
DESCRIPTION OF CP HOLDRS
HOLding Company Depositary ReceiptS(SM) for shares of common stock of
the successor companies are designed to provide current holders of the common
stock of the successor companies with a single exchange traded instrument
currently representing shares of common stock of the successor companies.
Pursuant to a plan of reorganization, in October 2001, Canadian Pacific
Limited split into five separate public companies--PanCanadian Petroleum
Limited, Canadian Pacific Railway Company, Fording Inc., CP Ships Holdings Inc.
and Fairmont Hotels & Resorts Inc. After the reorganization of Canadian Pacific,
the holders of Canadian Pacific held the equity securities of each of these
successor companies. PanCanadian Petroleum, amalgamated with PanCanadian Energy
Corporation on January 2, 2002, subsequently merged with Alberta Energy Co. on
April 5, 2002 and changed its name to EnCana Corp. These companies, or their
successors, are currently represented by CP HOLDRS.
CP HOLDRS are an alternative for existing or prospective holders of the
shares of common stock of the successor companies who would prefer to hold a
single security representing their investment in the successor companies. CP
HOLDRS help reduce the inconvenience of owning the shares of the successor
companies and help reduce the expenses associated with buying and selling the
common stock of each of the successor companies in a traditional brokerage
account with transaction-based charges.
CP HOLDRS are listed on the Toronto Stock Exchange and the New York
Stock Exchange, in each case, under the symbol "HCH".
CP HOLDRS represent your undivided beneficial ownership of the
underlying securities. Owners of CP HOLDRS have the same rights and privileges
as they would have if they owned the underlying securities beneficially outside
of CP HOLDRS. These include the right to instruct the depositary to vote the
underlying securities, to receive any dividends and other distributions on the
underlying securities that are declared and paid to the depositary by an issuer
of an underlying security, the right to pledge CP HOLDRS and the right to
surrender CP HOLDRS to receive the underlying securities. CP HOLDRS will not
change your ownership in the underlying securities under United States federal
securities laws, including sections 13(d) and 16(a) of the Exchange Act. As a
result, you will have the same obligations to file insider trading reports that
you would have if you held the underlying securities outside of CP HOLDRS.
However, due to the nature of CP HOLDRS, you will not be able to participate in
any dividend reinvestment program of an issuer of underlying securities unless
you cancel your CP HOLDRS (and pay the applicable fees) and receive all of the
underlying securities.
14
DESCRIPTION OF THE UNDERLYING SECURITIES
The following tables and graphs set forth the composite performance of
all of the five underlying securities currently represented by a single CP
HOLDR, measured from August 2001, the month in which each of the underlying
securities began trading on the NYSE and the Toronto Stock Exchange after giving
effect to the reorganization of Canadian Pacific Limited, through March 1, 2005,
on both the New York Stock Exchange and the Toronto Stock Exchange. The
performance tables and graph data are adjusted for any splits that may have
occurred over the measurement period. Past movements of the underlying
securities are not necessarily indicative of future values.
New York Stock Exchange
-----------------------
2001 Value (US$) 2002 Value (US$) 2003 Value (US$) 2004 Value (US$) 2005 Value (US$)
- ---- ----------- ---- ----------- ---- ----------- ---- ----------- ---- -----------
August 21 36.64 January 31 39.33 January 31 43.83 January 30 56.15 January 31 81.65
August 31 36.83 February 28 41.98 February 28 44.64 February 29 59.15 February 28 90.49
September 30 32.16 March 28 44.38 March 31 44.73 March 31 58.84 March 1 90.45
October 31 36.78 April 30 44.78 April 30 46.41 April 30 54.38
November 30 37.44 May 31 45.53 May 30 49.52 May 28 55.06
December 29 39.19 June 28 45.34 June 30 50.59 June 30 60.02
July 31 41.82 July 31 49.86 July 30 61.42
August 30 41.70 August 29 52.98 August 31 58.69
September 30 40.98 September 30 51.99 September 30 63.74
October 31 42.02 October 31 52.97 October 29 67.94
November 29 41.51 November 28 54.75 November 30 78.83
December 31 43.88 December 31 58.93 December 31 81.29
[GRAPHIC OMITTED]
15
Toronto Stock Exchange
----------------------
2001 Value (C$) 2002 Value (C$) 2003 Value (C$) 2004 Value (C$) 2005 Value (C$)
- ---- ---------- ---- ---------- ---- ---------- ---- ---------- ---- ----------
August 21 59.66 January 31 62.71 January 31 66.61 January 30 74.19 January 31 101.34
August 31 60.03 February 28 67.00 February 28 67.03 February 29 78.81 February 28 110.97
September 30 50.70 March 28 70.54 March 31 65.67 March 31 77.17 March 1 110.89
October 31 58.63 April 30 70.31 April 30 66.03 April 30 74.46
November 30 59.38 May 31 70.02 May 30 66.80 May 28 74.86
December 29 62.77 June 28 69.11 June 30 67.47 June 30 80.08
July 31 65.98 July 31 69.00 July 30 81.42
August 30 65.04 August 29 73.56 August 31 76.87
September 30 64.81 September 30 70.13 September 30 80.46
October 31 66.06 October 31 70.37 October 29 82.84
November 29 65.02 November 28 70.72 November 30 93.55
December 31 69.91 December 31 76.68 December 31 97.40
[GRAPHIC OMITTED]
16
DESCRIPTION OF THE DEPOSIT AGREEMENT
The following is a summary of the principal terms of the deposit
agreement, dated as of September 4, 2001, among Merrill Lynch Canada Inc., as
initial depositor and coordinator, BNY Trust Company of Canada, as depositary,
the owners and beneficial owners from time to time of CP HOLDRS and depositors
from time to time of underlying securities. The deposit agreement is governed by
the laws of Ontario. The CP HOLDRS Deposit Facility created by the deposit
agreement will terminate on December 31, 2041, unless an earlier termination
event occurs.
Right to Underlying Securities
The deposit agreement provides that CP HOLDRS represent an owner's
right to receive the underlying securities held by the depositary under the
deposit agreement.
Initial Depositor
The deposit agreement required Merrill Lynch Canada Inc. to initially
deposit 2,500 shares of common stock of Canadian Pacific with the depositary. In
return, Merrill Lynch Canada Inc. received 2,500 CP HOLDRS when CP HOLDRS were
originally issued. As such, Merrill Lynch Canada Inc., as initial depositor, is
the "issuer" of CP HOLDRS as such term is defined in Section 2(a)(4) of the
Securities Act of 1933, as amended and Section 3(a)(8) of the Exchange Act.
Neither Merrill Lynch Canada Inc. nor the depositary will regularly disseminate
to holders of CP HOLDRS the aggregate value of the underlying securities
represented by CP HOLDRS at any time. CP HOLDRS may trade at prices lower than
the aggregate value of the underlying securities represented by CP HOLDRS at any
time. If holders of CP HOLDRS wish to realize the dollar value of the underlying
securities represented by CP HOLDRS, they must surrender their CP HOLDRS (and
pay any applicable fees and expenses) and receive all of their underlying
securities. See "--Surrender of CP HOLDRS".
Depositary
BNY Trust Company of Canada, a Canadian trust company and an affiliate
of The Bank of New York, a state-chartered New York banking corporation and a
member of the United States Federal Reserve System, acts as the depositary.
Pursuant to the deposit agreement, the depositary agrees to accept deposits of
the underlying securities and to hold such underlying securities on behalf of
the owners of CP HOLDRS. The depositary does not have any investment discretion
with respect to the underlying securities and only performs ministerial and
administrative functions. As specified in the deposit agreement, CP HOLDRS are
obligations of BNY Trust Company of Canada, as depositary. The depositary has
agreed to perform all of the obligations specifically set forth in the deposit
agreement without negligence or bad faith. The depositary has agreed that it
will not, as depositary or in a similar capacity, sponsor or participate in any
other program or enter into any other agreement in connection with any
instrument to evidence ownership of or designed to represent the underlying
securities in a single trading instrument.
17
Fees and Expenses
The following is a summary of the fees payable in connection with CP
HOLDRS:
To create CP HOLDRS by delivering the requisite underlying securities:
Issuance Fee US$0.10
(payable to the depositary)
Ongoing Fees:
Annual Fee US$0.015
(payable to the depositary)
To cancel CP HOLDRS and receive the underlying securities:
Cancellation Fee US$0.10
(payable to the depositary)
Because the fee you will pay to create CP HOLDRS will be calculated by
rounding up the number of CP HOLDRS created to the nearest 100, the fee to
create between one and 100 CP HOLDRS is US$10.00. However, the depositary may
require a minimum deposit of underlying securities so that the depositary will
receive only whole share amounts for issuance of CP HOLDRS. As a result, based
on the current composition of CP HOLDRS, the depositary may require you to
deposit the quantity and classes of securities in an amount to create integral
multiples of 500 CP HOLDRS so that your beneficial ownership of the underlying
securities will be represented in only whole share amounts. This means you may
be required to pay an issuance fee to the depositary of US$50.00 in order to
create each integral multiple of 500 CP HOLDRS, if the depositary charges you
the maximum issuance fee of US$0.10 per CP HOLDR created.
The fees payable to the depositary indicated above are the maximum
amount of all such fees that may be charged (except that the amount of the
issuance and cancellation fees will be calculated by rounding up the number of
CP HOLDRS to the nearest 100). Because the issuance and cancellation fees will
be calculated by rounding up the number of CP HOLDRS to the nearest 100, the fee
to create and cancel between one and 100 CP HOLDRS could be as much as US$10.00,
if the depositary charges you the maximum US$0.10 fee per CP HOLDR. The issuance
fee to be paid for the issuance of CP HOLDRS and the cancellation fee payable to
surrender CP HOLDRS and receive the underlying securities are set at the
discretion of the depositary and may be less than US$0.10 per CP HOLDR. In
addition, the annual fee payable to the depositary will be deducted from the
cash distributions made on the underlying securities held by the depositary
under the deposit agreement. If cash distributions are not sufficient to pay the
annual fee, the depositary will waive that portion of the annual fee in that
calendar year that exceeds the total cash distributions.
Although it is not expected that the depositary will be required to
convert cash distributions into United States dollars for United States
residents, in the event that the depositary incurs any expenses in connection
with converting cash distributions into United States dollars for United States
residents, the depositary will deduct these expenses prior to making the
distribution. As discussed below in "--Distributions," you may elect to receive
cash distributions in either Canadian or U.S. dollars through your broker
through which you hold your CP HOLDRS.
If you choose to sell your CP HOLDRS on the Toronto Stock Exchange or
the New York Stock Exchange, you should not be charged any fees other than
standard commissions and other fees charged by your broker to execute trades on
your behalf.
If you choose to pay the cancellation fee or issuance fee to the
depositary in Canadian dollars or if the depositary collects the annual fee in
Canadian dollars, the fee will equal the relevant U.S. dollar fee and the last
published Bank of Canada daily noon rate for Canadian dollars on the date on
which the fee is payable or the depositary calculates the annual fee, as the
case may be.
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Issuer Reports and Voting of Underlying Securities
You will retain the right to receive any reports and communications
that the issuers of underlying securities are required to send to beneficial
owners of their securities. As such, you will receive such reports and
communications from the broker through which you hold your CP HOLDRS in the same
manner as if you beneficially owned your underlying securities outside of CP
HOLDRS in "street name" through a brokerage account. These reports currently
include annual reports, audited financial statements (including management's
discussion and analysis of financial condition and results of operations) and
management proxy circulars. The depositary will endeavor, insofar as is lawful
and feasible, to vote underlying securities in accordance with your
instructions. "Lawful and feasible" limitations on the voting of underlying
securities by the depositary contemplates situations where a court of competent
jurisdiction or other duly constituted governmental authority has enjoined the
depositary from complying with its duty to vote the underlying securities in
accordance with your instructions.
The depositary will not attempt to exercise the right to vote that
attaches to, or give a proxy with respect to, underlying securities other than
in accordance with your instructions. The depositary will forward any reports
and communications distributed to the depositary, as holder of the underlying
securities, by the issuers of underlying securities, if any, on behalf of owners
of underlying securities to owners of CP HOLDRS as promptly as practicable,
unless those reports will be sent directly to brokers by the issuers of the
underlying securities as described above. You will be entitled to receive proxy
materials and other shareholder communications with respect to any fractional
shares you may have in the underlying securities and you will retain
proportional voting rights with respect to such fractional shares. The
depositary will aggregate the votes of all of the share fractions represented by
CP HOLDRS and will vote the largest possible number of whole shares of such
underlying securities. If, after aggregation, there is a fractional remainder,
this fractional remainder will be ignored because the issuer will only recognize
whole share votes.
Canadian law and the deposit agreement allow you to attend and vote
your shares at shareholder meetings of the issuers of the underlying securities
by instructing the depositary that you wish to be appointed a proxy to vote the
underlying securities represented by your CP HOLDRS on your own behalf.
Distributions
The deposit agreement entitles you to receive, subject to certain
limitations and net of any fees of the depositary, any distributions of cash
(including dividends), securities or property made with respect to the
underlying securities. You will also be entitled to receive distributions
proportionate to any fractional shares you have in the underling securities.
Limitations on distributions include any distribution of securities by an issuer
of underlying securities will be retained by the depositary and will remain part
of the underlying securities if the distributed securities are registered under
Section 12 of the Exchange Act, are issued by a reporting issuer under Canadian
securities laws and are listed on a national securities exchange in Canada and
on either a national securities exchange in the United States or the Nasdaq
National Market System. Such securities will be added to the classes and
quantities of securities that must be deposited with the depositary to receive
CP HOLDRS. In addition, the depositary will not distribute a fraction of one
cent but will round to the nearest whole cent before distribution.
Distributions will be made by the depositary as soon as is practicable
following receipt by the depositary of such distributions. You may elect to
receive dividends with respect to underlying securities in either Canadian or
U.S. dollars by following the procedures established by your broker through
which you hold your CP HOLDRS.
There may be a delay (which is expected not to exceed one day) between
the time any cash or other distribution is received by the depositary with
respect to the underlying securities and the time such cash or other
distributions are distributed to you due to the need for the depositary to
process the flow of funds. Events beyond the control of the depositary, such as
computer failures and other disruptions of banking systems generally may also
result in a delay in distributions to you. You will not be entitled to any
interest on any distribution by reason of any delay in distribution by the
depositary. If any tax or other governmental charge becomes due with respect to
CP HOLDRS or any underlying securities, you will be responsible for paying that
tax or governmental charge.
If the depositary determines that any distribution in property is
subject to any tax or other charge which the depositary is obligated to
withhold, the depositary may sell all or a portion of such property in order to
pay any such
19
taxes or charges. The depositary will distribute to you the net proceeds of any
such sale after deduction of such taxes or charges.
The depositary will not distribute to you any fraction of a share.
Instead, the depositary will deliver cash in lieu of such fractions. The
depositary will not charge you any brokerage fees in connection with the sale of
such fractions.
The depositary will only distribute to you securities or other property
received in respect of underlying securities if lawful and feasible. "Lawful and
feasible" restrictions on distributions include circumstances where an issuer of
underlying securities declares a dividend of a security that is not qualified
for public offer and sale in the United States or Canada or a cash dividend is
declared by an issuer of underlying securities and a court of competent
jurisdiction or other governmental authority issues an injunction preventing the
depositary from paying the dividend.
In addition, if an issuer of underlying securities distributes an asset
that cannot be proportionately distributed among the holders of CP HOLDRS, the
depositary will adopt an equitable method (such that the depositary will convert
the asset into a form that may be distributed on a pro-rata basis to holders of
CP HOLDRS) of making the distribution (including the public or private sale of
the asset received, or any part thereof) and the net proceeds of any such sale
(after deduction of any expenses of the depositary and any fees) will be
distributed to you by the depositary, as in the case of a distribution of cash.
Rights Offerings
If an issuer of underlying securities offers or causes to be offered to
the holders of any underlying securities any rights to subscribe for additional
underlying securities or other securities, the rights will be made available to
you through the depositary, if practicable and if the rights and the securities
that those rights relate to can be made available under applicable securities
laws. Otherwise, if lawful and feasible, the depositary will use reasonable
efforts to sell the rights and the net proceeds will be distributed to you. In
all other cases the rights will lapse.
Offer for Underlying Securities
If you wish to participate in a tender offer or take-over bid for any
of the underlying securities, or any form of stock repurchase program by an
issuer of an underlying security, you must surrender your CP HOLDRS (and pay any
applicable fees) to the depositary and receive all of your underlying securities
in exchange for your CP HOLDRS. See "--Surrender of CP HOLDRS" for more
information on the surrender of CP HOLDRS.
Reconstitution Events
The deposit agreement provides for the distribution of underlying
securities to you in the following circumstances, referred to herein as
reconstitution events:
o If any class of underlying securities ceases to be outstanding as a
result of, or is surrendered by the depositary in connection with, a
merger, consolidation or other corporate combination of its issuer,
the depositary will distribute any securities received as
consideration from the acquiring company unless the securities
received are registered under Section 12 of the Exchange Act, are
issued by a reporting issuer under Canadian securities laws and are
listed for trading on a national securities exchange in Canada and on
either a national securities exchange in the United States or the
Nasdaq National Market System. In that case, the securities received
will be treated as additional underlying securities and shall be added
to the classes and quantities of securities that must be deposited for
issuance of CP HOLDRS.
o If any class of underlying securities is delisted from trading on its
primary exchange or market in either the United States or Canada and
is not listed for trading, as the case may be, on another national
securities exchange in Canada or on either a national securities
exchange in the United States or the Nasdaq National Market System, as
the case may be, within five business days from the date of such
delisting, the depositary will, to the extent lawful and feasible,
distribute those underlying securities to you in proportion to your
ownership of CP HOLDRS.
20
o If any class of underlying securities is no longer registered under
Section 12 of the Exchange Act or if an issuer of underlying
securities is no longer a reporting issuer under the Canadian
securities laws, the depositary will, to the extent lawful and
practicable, distribute the underlying securities of that company to
you.
o If the United States Securities and Exchange Commission determines
that an issuer of an underlying security is an investment company
under the United States Investment Company Act of 1940, and the
depositary has actual knowledge of such Commission determination, then
the depositary will, to the extent lawful and practicable, distribute
the underlying securities of such issuer to you in proportion to your
ownership of CP HOLDRS.
o If there is any other change in nominal value, change in par value,
split-up, consolidation or any other reclassification of any
underlying securities, or any recapitalization, reorganization, merger
or consolidation or sale of assets affecting the issuer of any
underlying securities in connection with which the depositary receives
securities that are not registered under Section 12 of the Exchange
Act, are not issued by a reporting issuer under Canadian securities
laws and are not listed on a national securities exchange in Canada
and either a national securities exchange in the United States or
through the Nasdaq National Market System in connection with such
event, the depositary will, to the extent lawful and practicable,
distribute any securities so received by the depositary to the owners
in proportion to their ownership of CP HOLDRS.
If the deposit agreement would otherwise require the depositary to
distribute the last remaining underlying securities to owners of CP HOLDRS in
connection with any of the reconstitution events described above, the depositary
may require the surrender of CP HOLDRS, including payment of the cancellation
fee to the depositary, as a condition of effecting the distribution.
The depositary will distribute any underlying securities required to be
distributed to owners of CP HOLDRS because of a reconstitution event as promptly
as practicable after the date that the depositary has knowledge of the
occurrence of a reconstitution event.
Underlying securities that are surrendered by the depositary that cease
to be outstanding or that are distributed to you by reason of a reconstitution
event will, effective on the date of such surrender or distribution, no longer
be part of the securities which must be deposited with the depositary for
issuance of CP HOLDRS.
Surrender of CP HOLDRS
The deposit agreement entitles you to surrender your CP HOLDRS to the
depositary and receive the underlying securities represented by those CP HOLDRS.
The depositary will deliver the underlying securities to surrendering owners of
CP HOLDRS as promptly as practicable. We expect, absent unforeseeable
difficulties or difficulties outside of the depositary's control, that the
depositary will deliver the underlying securities to surrendering owners of CP
HOLDRS on the business day they surrender their CP HOLDRS (if they surrender
their CP HOLDRS before noon) and on the next business day after they surrender
their CP HOLDRS (if they surrender their CP HOLDRS after noon). In addition, if
any fractional interests in underlying securities are represented by CP HOLDRS
at the time of the surrender of CP HOLDRS, the depositary will deliver cash in
lieu of such fractional interests.
This right can only be exercised subject to the terms, conditions and
limitations in the deposit agreement including:
o production of proof satisfactory to the depositary as to the
genuineness of any signature;
o provision to the depositary of proofs, certificates, representations
and warranties required by the deposit agreement; and
21
o that the depositary will not be required to distribute any fraction of
a share, but will instead deliver cash in lieu of such fractional
shares, to the surrendering owners of CP HOLDRS.
Withdrawal of underlying securities upon surrender of CP HOLDRS is also
subject to the payment of applicable fees (including the payment to the
depositary a cancellation fee of up to US$0.10 per CP HOLDR surrendered), taxes
or governmental charges, if any. Cancellation fees will be calculated by
rounding up the number of CP HOLDRS surrendered by you to the nearest 100.
Therefore, it will cost you up to US$10.00 to cancel between one and 100 CP
HOLDRS.
If you choose to pay the cancellation fee in Canadian dollars, the fee
will equal the product of the relevant U.S. dollar fee and the last published
Bank of Canada daily noon rate on the date on which you surrendered your CP
HOLDRS. See "--Fees and Expenses" for more information on the fees and expenses
payable in connection with CP HOLDRS.
Suspension of Delivery, Transfers or Surrenders
The delivery of CP HOLDRS against deposits of underlying securities,
the registration of transfer of CP HOLDRS or the surrender of CP HOLDRS for the
purpose of receiving underlying securities may be suspended, generally or in
particular instances, during any period when the transfer books of an issuer of
underlying securities are closed or if such action is considered necessary or
advisable by the depositary at any time or from time to time, subject to the
provisions of the following sentence. The surrender of CP HOLDRS and withdrawal
of underlying securities may not be suspended except for (1) temporary delays
caused by a closing of the transfer books the depositary or an issuer of the
underlying securities, (2) the payment of fees, taxes and applicable charges and
(3) compliance with any applicable laws relating to CP HOLDRS or to the
withdrawal of the underlying securities. The depositary will not knowingly
accept for deposit any underlying securities or deliver any CP HOLDRS unless the
public offer and sale of such underlying securities by the holder is permitted
under the securities laws of both the United States and Canada.
Liability for Taxes and Other Charges
You will be responsible for paying any tax or other governmental charge
with respect to any CP HOLDRS or any underlying securities. The depositary will
refuse to effect any transfer of such CP HOLDRS or permit any withdrawal of
applicable underlying securities until the payment is made, and may withhold any
dividends or other distributions, or may sell for your account underlying
securities constituting any multiples of the securities which must be deposited
for issuance of CP HOLDRS, and may apply dividends or other distributions or the
proceeds of any such sale in payment of the tax or other charge and you will
remain liable for any deficiency.
Warranties and Authorization
Every holder of underlying securities who deposits underlying
securities pursuant to the deposit agreement is deemed by the deposit to
represent and warrant that such underlying securities at the time of such
deposit are validly issued, fully paid and nonassessable, that the person making
such deposit is duly authorized to do so and that at the time of delivery, such
underlying securities are free and clear of any lien, pledge, encumbrance,
right, charge or claim (other than the rights created by the deposit agreement).
Every such holder is also deemed to represent that such underlying securities at
the time of such deposit are, and CP HOLDRS representing such underlying
securities would be, securities that are freely tradeable under applicable
securities laws, any shareholder agreement or the corporate documents of the
issuer. Such representations and warranties will survive the deposit of
underlying securities, issuance of CP HOLDRS or termination of the deposit
agreement. In addition, each person that becomes a registered owner or
beneficial owner of CP HOLDRS is deemed thereby to authorize the depositary to
execute and deliver the deposit agreement on the person's behalf and is deemed
to be bound by the deposit agreement as if the person signed it directly.
Because these representations relate to the time of the deposit of securities,
they apply to the deposit of CP Shares prior to the reorganization of Canadian
Pacific and to the shares of underlying securities deposited with the depositary
after the reorganization of Canadian Pacific.
22
Prevention or Delay in Performance
Under the deposit agreement, neither the depositary, Merrill Lynch
Canada Inc., nor any of their respective directors, employees, agents or
affiliates will incur any liability to any holder of a CP HOLDR, if by reason of
any provision of any law, or by reason of any provision of the corporate
documents of any issuer of underlying securities, or by reason of any provisions
of any underlying securities, or any offering or distribution thereof, or by
reason of any act of God or war or other circumstances beyond its control, the
depositary or Merrill Lynch Canada Inc. is prevented or forbidden from, or would
be subject to any civil or criminal penalty on account of, doing or performing
any act or thing which by the terms of the deposit agreement it is provided will
be done or performed. In addition, neither the depositary nor Merrill Lynch
Canada Inc. will incur any liability to any owner of a CP HOLDR by reason of any
non-performance or delay, caused as aforesaid, in the performance of any act or
thing which by the terms of the deposit agreement it is provided will or may be
done or performed. Notwithstanding anything herein to the contrary, neither
Merrill Lynch Canada Inc. nor the depositary in any way disclaims any liability
for violations by them, respectively, of U.S. federal securities laws.
Resignation or Removal of Depositary
The depositary may at any time resign as depositary by written notice
of its election so to do, delivered to Merrill Lynch Canada Inc., and the
resignation will take effect upon the appointment of a successor depositary and
its acceptance of the appointment.
If at any time the depositary is in material breach of its obligations
under the deposit agreement and the depositary fails to cure the breach within
30 days after receipt by the depositary of written notice from owners of 25% or
more of the outstanding CP HOLDRS or from Merrill Lynch Canada Inc., acting on
behalf of the owners, specifying the default and requiring the depositary to
cure the default, Merrill Lynch Canada Inc. may remove the depositary by written
notice delivered to the depositary, and such removal shall take effect upon the
appointment of a successor depositary and its acceptance of such appointment.
If at any time the depositary resigns or is removed, Merrill Lynch
Canada Inc. shall use its reasonable efforts to appoint a successor depositary,
which will be a bank or trust company having an office in Canada and (i) will
have the capital surplus set forth in Section 26(a)(1) of the United States
Investment Company Act of 1940, (ii) will be affiliated with a U.S. bank that is
a state-chartered bank that is a member of the Federal Reserve System, (iii)
will be a trust company under the Canadian Trust and Loan Companies Act, and
(iv) will be regulated by the Canadian Office of the Superintendent of Financial
Institutions. Every successor depositary shall execute and deliver to its
predecessor and to Merrill Lynch Canada Inc. an acceptance of its appointment,
and thereafter will become fully vested with all the rights, powers, duties and
obligations of its predecessor.
Amendments to the Deposit Agreement
Any provisions of the deposit agreement may be amended at any time
without the consent of the owners or beneficial owners of CP HOLDRS. Any
amendment that imposes or increases any fees or charges (other than taxes and
other charges, registration fees or other such expenses) or that otherwise
prejudices any substantial existing right of the owners or beneficial owners of
CP HOLDRS will not become effective until 30 days after notice of the amendment
is given to the owners of CP HOLDRS. In no event will any amendment impair the
right of an owner of a CP HOLDR to surrender CP HOLDRS and receive the
underlying securities except in order to comply with mandatory provisions of
applicable laws.
Termination of Deposit Agreement
The depositary will terminate the deposit agreement by mailing notice
of termination to the owners of CP HOLDRS if (1) the depositary is notified that
CP HOLDRS are no longer listed on a national securities exchange in Canada and
either a national securities exchange in the United States or the Nasdaq
National Market System, as the case may be, and CP HOLDRS are not approved for
listing on another national securities exchange in Canada and either a national
securities exchange in the United States or the Nasdaq National Market System,
as the case may be, within 5 business days of their delisting, (2) 60 days have
passed after the depositary has delivered to Merrill Lynch
23
Canada Inc. a written notice of its election to resign and no successor has been
appropriately appointed or (3) at least 75% of the owners of outstanding CP
HOLDRS (other than Merrill Lynch Canada Inc. or its affiliates) notify the
depositary that they elect to terminate the deposit agreement.
After termination of the deposit agreement:
o As a condition of distributing underlying securities to you, the
depositary will charge you a cancellation fee of up to US$0.10
per CP HOLDR cancelled, along with any taxes or other
governmental charges, if any. The cancellation fee will be
calculated by rounding up the number of CP HOLDRS to the nearest
100;
o the depositary will do the following under the deposit agreement
but nothing else: (1) advise owners of CP HOLDRS that the deposit
agreement is terminated, (2) collect distributions on the
underlying securities, (3) sell rights and other property on
behalf of owners of CP HOLDRS, and (4) deliver underlying
securities upon surrender of CP HOLDRS and payment of applicable
fees, taxes or charges. One year after termination, the
depositary may sell any remaining underlying securities by public
or private sale. After that, the depositary will hold the money
it received on the sale, as well as any other cash it is holding
under the deposit agreement for the prorata benefit of owners
that have not surrendered their CP HOLDRS. It will not invest the
money and has no liability for interest. The depositary's only
obligations will be to account for the money and other cash after
deducting applicable fees, charges and taxes; and
o the only obligation of Merrill Lynch Canada Inc. after
termination of the deposit agreement will be to indemnify the
depositary and to pay fees and expenses of the depositary that it
agreed to pay.
Book Entry System
CP HOLDRS are issued in "book-entry only" form and are represented by
one or more global certificates registered in the name of CDS & CO., the nominee
of CDS, and deposited with CDS. U.S. holders of CP HOLDRS hold their interests
in the global certificates indirectly through DTC. DTC is, in turn, a
participant in CDS. All interests of Canadian and U.S. holders of CP HOLDRS in
the global certificates, including those held through DTC, are subject to the
procedures and requirements of CDS. Those interests held through DTC may also be
subject to the procedures and requirements of DTC.
CP HOLDRS must be created or transferred through a participant in the
book-entry systems of CDS in Canada or DTC in the United States. CDS and DTC
hold securities deposited by their participants and facilitate the settlement
among participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
participants' accounts, thus eliminating the need for physical movement of
securities certificates. BNY Trust Company of Canada, or its successor, will
cause CP HOLDRS to be delivered to CDS and registered in the name of the nominee
of CDS. Ownership of interests in CP HOLDRS will be on, and transfers of CP
HOLDRS will be made only through, the book-entry systems of CDS and DTC.
Except as described below, you are not be entitled to a certificate or
other instrument from BNY Trust Company of Canada, or its successor, CDS or DTC
evidencing your CP HOLDRS, and you will not be shown on the records maintained
by CDS or DTC, except through a participant. You are expected to receive written
confirmation of any transaction involving CP HOLDRS, as well as periodic
statements of your interest in CP HOLDRS, from your broker, dealer or financial
institution through which you hold your CP HOLDRS. Transfers of ownership
interest in CP HOLDRS are to be accomplished by entries made on the books of CDS
or DTC or participants in those systems acting on your behalf.
Neither BNY Trust Company of Canada, its successor, nor Merrill Lynch
Canada Inc. assume any liability for:
o any aspect of the records relating to the beneficial ownership of
CP HOLDRS held by CDS or DTC;
24
o maintaining, supervising or reviewing any records relating to the
beneficial ownership of CP HOLDRS; or
o any advice or representation made by or with respect to CDS or
DTC and relating to the rules governing CDS and DTC or any action
to be taken by CDS or DTC or at the direction of its
participants.
The rules governing CDS and DTC provide that each acts as the agent and
depository for the participants. As a result, participants must look solely to
CDS or DTC, as applicable, and you must look solely to participants for payments
with respect to CP HOLDRS paid by or on BNY Trust Company of Canada's or its
successor's behalf to CDS or DTC.
BNY Trust Company of Canada and Merrill Lynch Canada Inc. have been
advised that CDS and DTC have a contractual relationship that allows U.S.
holders of CP HOLDRS to hold their interests in the global certificates
indirectly through DTC as a participant in CDS. If either party terminates its
obligations under that contract while interests in the global certificates are
held by U.S. holders of CP HOLDRS, the portion of the global certificate held by
U.S. holders of CP HOLDRS may be cancelled and reissued in the name of Cede &
Co. and deposited with DTC.
CP HOLDRS will be issued to you in certificated form only if:
o that action is required under applicable law;
o CDS or DTC advises BNY Trust Company of Canada or its successor
that either CDS or DTC is no longer willing or able to properly
discharge its responsibilities as depository with respect to CP
HOLDRS and BNY Trust Company of Canada or its successor is unable
to locate a qualified successor; or
o CDS ceases to be a clearing agency or otherwise ceases to be
eligible to be a depository and BNY Trust Company of Canada or
its successor is unable to locate a qualified successor.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, BNY Trust Company of Canada or its successor will notify
CDS and DTC, for and on behalf of participants and owners of CP HOLDRS, of the
availability of certificated CP HOLDRS. Upon surrender by CDS of the global
certificate representing CP HOLDRS and receipt of instructions from CDS for the
new registrations, BNY Trust Company of Canada or its successor will deliver the
certificated CP HOLDRS.
CDS and DTC have advised us as follows:
CDS
CDS was incorporated in 1970 and is Canada's national securities
clearing and depository services organization. Functioning as a service utility
for the Canadian financial community, CDS provides a variety of computer
automated services for financial institutions and investment dealers active in
domestic and international capital markets. CDS participants include banks,
investment dealers and trust companies and may include the coordinator and the
depositary. Access to CDS is available to other organizations that clear through
or maintain a custodial relationship with a CDS participant. Transfers of
ownership and other interests, including cash distributions, in securities held
by CDS may only be processed through CDS participants and will be completed in
accordance with existing CDS rules and procedures. CDS operates in Montreal,
Toronto, Calgary and Vancouver to centralize securities clearing functions
through a central securities depository.
CDS is a private corporation, owned one-third by investment dealers,
one-third by banks and one-third by trust companies through their respective
industry associations. CDS is the exclusive clearing house for equity trading on
both the Toronto and Montreal stock exchanges and also clears a substantial
volume of "over the counter" trading in equities and bonds.
25
DTC
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the U.S. Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered under the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thus eliminating the need for physical
movement of securities certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and a number
of other organizations. DTC is owned by a number of its direct participants and
by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to DTC's system is also
available to others such as securities brokers and dealers and banks and trust
companies that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. The rules applicable to DTC and its
participants are on file with the U.S. Securities and Exchange Commission.
The information in this section concerning CDS, DTC and their
respective systems has been obtained from sources believed to be reliable, but
is subject to any changes to the arrangements between BNY Trust Company of
Canada or its successor and CDS or between CDS and DTC and any changes to those
procedures that may be instituted unilaterally by CDS or DTC.
26
PLAN OF DISTRIBUTION
Continuous Offering
Holders of shares of common stock of the successor companies currently
represented in CP HOLDRS can deposit those shares (along with the applicable
issuance fee) with the depositary in order to receive CP HOLDRS. However, the
depositary may require a minimum deposit of underlying securities so that the
depositary will receive only whole share amounts for issuance of CP HOLDRS. As a
result, based on the current composition of CP HOLDRS, the depositary may
require you to deposit the quantity and classes of securities in an amount to
create integral multiples of 500 CP HOLDRS so that your beneficial ownership
will be represented in only whole share amounts. You will receive integral
multiples of 500 CP HOLDRS upon the deposit of these quantities and these
classes of securities.
The issuance fee to be paid for the issuance of CP HOLDRS is set at the
discretion of the depositary and will be US$0.10 or less per CP HOLDR. The
issuance fee will be calculated by rounding up the number of CP HOLDRS issued to
the nearest 100.
Transfers of interests in CP HOLDRS will only be effected through the
book-entry system administered by CDS directly in Canada and, indirectly,
through DTC in the United States. Except for the circumstances described in
"Description of the Deposit Agreement--Book Entry System", you will not have the
right to receive physical certificates evidencing your CP HOLDRS.
This offering is being made in compliance with Conduct Rule 2810 of the
National Association of Securities Dealers, Inc. Accordingly, sales will not be
made to a discretionary account without the prior written approval of a
beneficial owner of CP HOLDRS.
27
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
General
The discussion set forth below represents the opinion of Shearman &
Sterling LLP, special U.S. tax counsel to Merrill Lynch Canada Inc., and
describes the material U.S. federal income tax consequences of the purchase,
ownership and disposition of CP HOLDRS, subject to the limitations set forth
below, for:
o an individual who is a citizen or resident of the United States;
o a corporation (or an entity treated as a corporation for U.S.
federal income tax purposes) created or organized in the United
States or under the laws of the United States or any state
thereof of the District of Columbia;
o an estate, the income of which is includible in gross income for
U.S. federal income tax purposes regardless of its source; and
o a trust if either (i) it is subject to the primary supervision of
a U.S. court and one or more U.S. persons have the authority to
control all substantial decisions of the trust or (ii) it has a
valid election in effect under applicable Treasury Regulations to
be treated as a U.S. person (each of the above, a "U.S. Holder").
If a partnership (or an entity treated as a partnership for U.S.
federal income tax purposes) holds CP HOLDRS, the tax treatment of the
partnership and each partner will generally depend on the status of the partner
and the activities of the partnership. Partnerships acquiring CP HOLDRS, and
partners in such partnerships, should consult their own tax advisors.
This summary is based upon laws, regulations, rulings and decisions
currently in effect, all of which are subject to change or differing
interpretations, possibly on a retroactive basis. The discussion does not deal
with all U.S. federal income tax consequences applicable to all categories of
investors, some of which may be subject to special rules, such as (without
limitation) tax-exempt entities, banks, dealers in securities, a U.S. Holder
whose functional currency is not the U.S. dollar, investors who acquire or hold
any CP HOLDRS as part of a conversion, straddle or other hedging transaction,
certain former citizens and residents of the United States and persons subject
to the alternative minimum tax. In addition, this summary generally is limited
to investors who will hold CP HOLDRS as "capital assets" (generally, property
held for investment) within the meaning of section 1221 of the Internal Revenue
Code of 1986, as amended ("the Code"). Moreover, this summary does not address
CP HOLDRS held by any person other than a U.S. Holder or CP HOLDRS held by a
partnership or other flow through entity. We recommend that you consult with
your own tax advisor with regard to the application of the U.S. federal income
tax laws to your particular situation as well as any tax consequences arising
under the laws of any state, local or non-U.S. jurisdiction
..
Taxation of the arrangement
The arrangement will provide for flow through tax consequences as it
will be treated as a grantor trust or custodial arrangement for U.S. federal
income tax purposes.
Taxation of CP HOLDRS
A holder owning CP HOLDRS will be treated, for U.S. federal income tax
purposes, as directly owning the underlying securities represented by CP HOLDRS.
Consequently, if there is a taxable cash distribution on an underlying security,
a holder will recognize income with respect to the distribution at the time the
distribution is received by the depositary, not at the time that the holder
receives the cash distribution from the depositary.
28
With respect to purchases of CP HOLDRS for cash in the secondary
market, a holder will determine its initial tax basis in each of the underlying
securities by allocating the purchase price for CP HOLDRS among the underlying
securities based on their relative fair market values at the time of purchase.
Thus, the aggregate of a holder's tax basis in each of the underlying securities
will be equal to the purchase price of CP HOLDRS. Similarly, when a holder sells
a CP HOLDR, it will determine the amount realized with respect to each security
by allocating the sales price among the underlying securities based on their
relative fair market values at the time of sale. Accordingly, the amount
realized with respect to a sale of CP HOLDRS will be equal to the aggregate
amount realized with respect to each of the underlying securities. A holder's
gain or loss with respect to each security will be computed by subtracting its
adjusted tax basis in the security from the amount realized on the security.
The distribution of any securities by the depositary upon the surrender
of CP HOLDRS, the occurrence of a reconstitution event, or the termination of
the deposit agreement will not be a taxable event, except to the extent that
cash is distributed in lieu of fractional shares. Gain or loss with respect to
fractional shares shall be computed by allocating a portion of the aggregate tax
basis of the distributed securities to such fractional shares. The holder's
aggregate tax basis with respect to the distributed securities will be the same
as when held through the CP HOLDRS, less any tax basis allocated to fractional
shares. A holder's holding period with respect to the distributed securities
will include the period that the holder held the securities through the CP
HOLDR.
Coordination fees and depositary fees
The coordination fee payable to the coordinators will be treated as
part of the cost of the underlying securities and should be included in a
holder's tax basis in the underlying securities. A holder will allocate the
coordination fee among the underlying securities using either a fair market
value allocation or pro rata based on the number of shares of each underlying
security. Thus, such amount will not be allowed as a deductible expense, but
instead, upon a taxable disposition of CP HOLDRS, will reduce the amount of gain
or increase the amount of loss with respect to the underlying securities.
A holder will be required to include in its income the full amount of
dividends paid on the underlying securities, even though the deposit agreement
provides that the depositary fees will be deducted directly from any dividends
paid. These depositary fees will be treated as an expense incurred in connection
with a holder's investment in the underlying securities and may be deductible.
If a holder is an individual, estate or trust, however, the deduction of its
share of depositary fees will be a miscellaneous itemized deduction that may be
disallowed in whole or in part.
Special considerations with respect to underlying securities of foreign issuers
Because CP HOLDRS will represent ownership of underlying securities of
foreign issuers, CP HOLDRS will be subject to special U.S. federal income tax
rules, which will result in the following tax consequences.
Qualified dividend income received in respect of CP HOLDRS by holders
who are individuals, trusts and estates will be eligible for U.S. federal income
taxation at preferential rates. Qualified dividend income includes dividends
received from "qualified foreign corporations," as such term is defined below.
In order for such dividends to qualify for the preferential rates, specific
minimum holding period requirements must be met, and for this purpose, a
holder's holding period with respect to an underlying security may be tolled for
any period in which such holder has diminished its risk of loss in respect of
such security by (for example) entering into a hedging transaction. Special
rules apply to a holder who leverages its investment in CP HOLDRS.
A qualified foreign corporation includes:
o a foreign corporation that is eligible for the benefits of a
comprehensive U.S. income tax treaty, approved by the Treasury
Department, that includes an exchange of information program, and
o a foreign corporation if the stock with respect to which a dividend is
paid is readily tradable on an established market in the United States
(which includes the NYSE).
but will not include:
29
o a passive foreign investment company (as defined below),
o a foreign personal holding company (as specially defined in the Code),
or
o a foreign investment company (as specially defined in the Code).
Pursuant to recently enacted legislation, the foreign personal holding
company rules and the foreign investment company rules have generally been
repealed for taxable years of foreign corporations beginning after December 31,
2004.
The gross amount of any taxable cash distribution will generally not be
eligible for the dividends received deduction generally allowed to corporate
U.S. Holders. If a successor company pays a dividend in a currency other than in
U.S. dollars, the amount of the dividend for U.S. federal income tax purposes
will be the U.S. dollar value (determined at the spot rate on the date of the
payment) regardless of whether the payment is later converted into U.S. dollars.
In this case, the U.S. Holder may recognize ordinary income or loss as a result
of currency fluctuations between the date on which the dividend is paid and the
date the dividend amount is converted into U.S. dollars.
Subject to conditions and limitations, any foreign tax withheld on
dividends may be deducted from taxable income or credited against a U.S.
Holder's U.S. federal income tax liability. The limitation on foreign taxes
eligible for the U.S. foreign tax credit is calculated separately with respect
to specific classes of income. For this purpose, dividends distributed by a
foreign issuer generally will constitute "passive income" or, in the case of
some U.S. Holders, "financial services income." Pursuant to recently enacted
legislation, for taxable years beginning after December 31, 2006, the number of
specific classes of income for which a separate limitation on foreign taxes
eligible for the U.S. foreign tax credit is calculated will be reduced to two
types of income, "passive income" and "general income." In addition, dividends
distributed by a foreign issuer that constitutes "financial services income"
with respect to a U.S. Holder will be treated as constituting "general income."
For purposes of the U.S. foreign tax credit limitation, dividends received by a
U.S. Holder with respect to an underlying security of a foreign issuer generally
will be treated as foreign source income while any gain or loss recognized from
the sale of such security generally will be treated as from sources within the
United States. The rules relating to the determination of the foreign tax credit
are complex and we recommend that U.S. Holders consult their own tax advisors to
determine whether and to what extent a credit would be available.
Dividends and distributions made by a successor company, may be subject
to Canadian withholding tax at the rate of 25%, which rate is subject to
reduction under the provisions of the Canada-United States Income Tax
Convention, 1980, to 15%, and may in some cases be reduced or eliminated.
Holders should consult their tax advisors regarding their entitlement to a
reduced withholding rate.
Additionally, special U.S. federal income tax rules apply to U.S.
persons owning shares of a "passive foreign investment company" (a "PFIC"). The
Initial Depositor is not aware that any of the successor companies currently is
a PFIC, although no assurances can be made that the applicable tax law or other
relevant circumstances will not change in a manner which affects the PFIC
determination. The Initial Depositor will notify the trustee, who will in turn
notify the holders, if it becomes aware that any of the successor companies is a
PFIC. In order for EnCana to avoid classification as a PFIC, "substantially all"
of its business must be that of an active producer, processor, merchant or
handler of commodities. EnCana is an active producer and handler of oil and
natural gas, but is also engaged in related businesses including gas storage
operations that probably, but do not clearly, qualify as part of EnCana's
business as an active producer and handler of commodities. Even if EnCana's
related businesses do not so qualify, the scope of such related businesses
combined with the scope of its passive investments probably is not sufficient to
cause EnCana to fail to satisfy the "substantially all" test mentioned above.
A foreign corporation generally will be classified as a PFIC for U.S.
federal income tax purposes in any taxable year in which, after applying
relevant look-through rules, either:
o at least 75% of its gross income is "passive income"; or
o on average at least 50% of the gross value of its assets is
attributable to assets that produce "passive income" or are held for
the production of passive income.
30
Passive income for this purpose generally includes dividends, interest,
royalties, rents, and gains from commodities and securities transactions.
If a corporation were classified as a PFIC, a U.S. Holder could be
subject to increased tax liability, possibly including an interest charge, upon
the sale or other disposition of CP HOLDRS or of the underlying securities or
upon the receipt of "excess distributions", unless the U.S. Holder has made one
of certain elections (to the extent available under specific rules) including an
election to be taxed currently on its pro rata portion of the corporation's
income, whether or not the income was distributed in the form of dividends or
otherwise.
Backup withholding and information reporting
Payments of dividends made by a successor company, on, or the proceeds
of the sale or other disposition of, the shares of its common stock may be
subject to information reporting and U.S. federal backup withholding tax at the
applicable rate if the recipient of such payment fails to supply an accurate
taxpayer identification number or otherwise fails to comply with applicable U.S.
information reporting or certification requirements. Any amount withheld from a
payment to a U.S. Holder under the backup withholding rules is allowable as a
credit against the holder's U.S. federal income tax and may entitle the U.S.
Holder to a refund, provided that the required information is furnished to the
Internal Revenue Service on a timely basis.
31
ERISA CONSIDERATIONS
Any plan fiduciary that proposes to have a plan acquire CP HOLDRS
should consult with its counsel with respect to the potential applicability of
ERISA and the United States Internal Revenue Code to this investment and whether
any exemption would be applicable and determine on its own whether all
conditions have been satisfied. Moreover, each plan fiduciary should determine
whether, under the general fiduciary standards of investment prudence and
diversification, an acquisition of CP HOLDRS is appropriate for the plan, taking
into account the overall investment policy of the plan and the composition of
the plan's investment portfolio.
LEGAL MATTERS
Legal matters, including the validity of CP HOLDRS, were passed upon
for Merrill Lynch Canada Inc., the initial depositor and coordinator, by Torys,
Toronto, Canada. Shearman & Sterling LLP, New York, New York, as special U.S.
tax counsel to the coordinators, rendered an opinion regarding the material U.S.
federal income tax consequences relating to CP HOLDRS.
DEPOSITARY
The depositary for CP HOLDRS is BNY Trust Company of Canada at its
principal office in Toronto located at 4 King Street West, Suite 1101, Toronto,
Ontario, M5H 1B6. The depositary is responsible for receiving deposits of the
underlying securities and issuing CP HOLDRS. The depositary holds the underlying
securities on behalf of the depositing shareholders. See "Description of Deposit
Agreement." U.S. holders of CP HOLDRS can get information with respect to CP
HOLDRS in the United States from The Bank of New York, ADR Department, 101
Barclay Street, New York, NY 10286.
WHERE YOU CAN FIND MORE INFORMATION
Merrill Lynch Canada Inc. filed a registration statement on Form F-1
with the SEC covering CP HOLDRS. While this prospectus is a part of the
registration statement, it does not contain all the exhibits filed as part of
the registration statement. You should consider reviewing the full text of those
exhibits.
You may read and copy the registration statement (including the
exhibits) at the SEC's public reference rooms in Washington, D.C. Please call
the SEC at 1-800-SEC-0330 for more information on the public reference rooms and
their copy charges. Merrill Lynch Canada Inc. will also file modified periodic
reports with respect to CP HOLDRS pursuant to the Exchange Act. These modified
periodic reports may also be read and copied at the SEC's public reference room.
The issuers of the underlying securities are also considered foreign
issuers. The requirements for filing periodic financial and other information
with the SEC for foreign issuers differ from that of domestic issuers. In
particular, foreign issuers are currently not required to file quarterly reports
with the SEC and are not required to file periodic financial and other
information on EDGAR. Information regarding the issuers may not be accessible
through the SEC's Web site, but documents filed with the SEC by the underlying
issuers may be inspected at the SEC's public reference room. Information
regarding the issuers of the underlying securities may be obtained from other
sources including, but not limited to, press releases, newspaper articles and
other publicly disseminated information.
Merrill Lynch Canada Inc., the depositary and their respective
affiliates are not affiliated with the issuers of the underlying securities, and
the issuers of the underlying securities have no obligations with respect to CP
HOLDRS. This prospectus relates only to CP HOLDRS and does not relate to the
other securities of the issuers of the underlying securities. We have not
participated in the preparation of these documents or made any due diligence
inquiries with respect to the issuers of the underlying securities in connection
with CP HOLDRS. We make no representation that the publicly available documents
of or any other publicly available information regarding the
32
issuers of the underlying securities are accurate or complete. Furthermore, we
cannot assure you that all events occurring prior to the date of this
prospectus, including events that would affect the accuracy or completeness of
the publicly available documents described in the preceding paragraph, that
would affect the trading price of the securities of the issuers of the
underlying securities, and therefore the offering and trading prices of CP
HOLDRS have been publicly disclosed.
33
ANNEX A
This annex forms an integral part of this prospectus.
The following tables provide a brief description of the business of
each of the issuers of the underlying securities and set forth the
split-adjusted closing market prices, as reported on the New York Stock
Exchange, of each of the underlying securities as of the end of each month from
August 2001, the month in which each of the underlying securities began trading
on the NYSE after giving effect to the reorganization of Canadian Pacific
Limited, through February 2005. All share prices are in U.S. dollars. The
historical prices of the underlying securities given below should not be taken
as an indication of future performance.
ENCANA CORP. (ECA)
On April 5, 2002, PanCanadian Energy Corporation completed its merger
with Alberta Energy Company Ltd. As a result of the merger, PanCanadian Energy
Corporation changed its name to EnCana Corp. (PanCanadian Energy Corporation was
formed by its amalgamation with PanCanadian Petroleum Limited, which was formed
pursuant to the split up of Canadian Pacific, on January 2, 2002.) EnCana is an
independent crude oil and natural gas exploration and production company,
involved in the exploration, production and marketing of natural gas, crude oil
and natural gas liquids. The majority of EnCana's landholdings are located in
Western Canada, offshore Canada's East Coast, the United Kingdom Central North
Sea, the United States Rocky Mountains, Ecuador and the Gulf of Mexico. Encana
also has interests in midstream operations and assets, including natural gas
storage and processing facilities, power plants and pipelines. Shares of EnCana
also trade on the Toronto Stock Exchange.
Closing Closing Closing Closing Closing
2001 Price 2002 Price 2003 Price 2004 Price 2005 Price
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
January * January 26.60 January 31.41 January 39.10 January 59.09
February * February 28.98 February 32.83 February 43.45 February 66.89
March * March 29.74 March 32.36 March 43.12
April * April 31.45 April 32.90 April 39.22
May * May 30.70 May 36.65 May 39.35
June * June 30.60 June 38.37 June 43.16
July * July 28.32 July 34,54 July 44.32
August 23.60 August 29.40 August 37,45 August 41.10
September 24.00 September 30.10 September 36.38 September 46.30
October 27.70 October 29.10 October 34.37 October 49.40
November 25.60 November 27.21 November 36.73 November 57.03
December 26.00 December 31.10 December 39.44 December 57.06
The closing price on March 1, 2005, was US$66.67.
A-1
FORDING CANADIAN COAL TRUST (FDG)
On February 28, 2003, Fording Inc. was, pursuant to a court-approved
and shareholder-approved plan of arrangement reorganized into the Fording
Canadian Coal Trust. In connection with the plan of arrangement, shares of
Fording Inc. were exchanged for units of Fording Canadian Coal Trust. These
units have been included in CP HOLDRS. Fording Canadian Coal Trust is an
open-ended investment mutual fund, which, through its ownership of Fording Inc.,
maintains investments in metallurgical coal and industrial minerals mining and
processing operations. Fording Inc. holds a 65% ownership interest in Elk Valley
Coal Partnership and produces the industrial mineral wollastonite. Wollastonite
is a non-metallic industrial mineral used in the manufacture of ceramics,
plastics, coatings and construction materials. The trust pays its unit holders
its trust distributable cash each fiscal quarter. Shares of Fording also trade
on the Toronto Stock Exchange.
Closing Closing Closing Closing Closing
2001 Price 2002 Price 2003 Price 2004 Price 2005 Price
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
January * January 16.67 January 22.22 January 32.76 January 79.60
February * February 17.99 February 20.83 February 40.43 February 93.49
March * March 19.54 March 19.45 March 40.35
April * April 19.19 April 17.83 April 38.45
May * May 20.90 May 17.40 May 37.75
June * June 19.01 June 18.12 June 42.10
July * July 15.81 July 19.10 July 46.80
August 15.53 August 15.02 August 20.18 August 49.30
September 13.60 September 14.80 September 21.70 September 55.97
October 15.30 October 20.77 October 25.88 October 59.00
November 15.88 November 20.60 November 26.43 November 74.60
December 17.87 December 20.96 December 35.52 December 77.15
The closing price on March 1, 2005, was US$91.70.
A-2
CANADIAN PACIFIC RAILWAY COMPANY (CP)
Canadian Pacific Railway Company provides rail and intermodal
transportation services principally in the midwestern and northeastern regions
of the United States and the principal business centers of Canada. The products
that are primarily transported by Canadian Pacific include, bulk commodities,
merchandise freight and intermodal traffic. Bulk commodities include grain,
coal, sulphur and potash. Merchandise freight consists of finished vehicles,
automotive parts and forest and industrial products. Intermodal traffic consists
of high-value, time-sensitive consumer products transported in overseas
containers and in domestic containers and trailers. Shares of Canadian Pacific
Railway also trade on the Toronto Stock Exchange.
Closing Closing Closing Closing Closing
2001 Price 2002 Price 2003 Price 2004 Price 2005 Price
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
January * January 19.50 January 20.00 January 25.95 January 33.68
February * February 20.10 February 20.88 February 23.51 February 35.47
March * March 21.42 March 21.09 March 24.18
April * April 20.85 April 23.15 April 22.22
May * May 22.52 May 23.76 May 22.39
June * June 24.52 June 22.60 June 24.63
July * July 22.13 July 24.28 July 25.47
August 19.00 August 20.69 August 24.37 August 25.45
September 15.50 September 18.25 September 23.61 September 25.78
October 16.86 October 19.81 October 27.99 October 28.25
November 19.21 November 20.35 November 27.24 November 32.74
December 19.50 December 19.70 December 28.15 December 34.41
The closing price on March 1, 2005, was US$35.81.
A-3
CP SHIPS LIMITED (TEU)
CP Ships Limited is a container shipping company that offers
international, door-to-door and port-to-port transportation for containerized
cargo comprised of industrial and consumer goods, including raw materials,
semi-manufactured and finished goods. CP Ships' shipping lines offer a network
of regional services under the brand names ANZDL, Canada Maritime, Cast,
Contship Containerlines, Lykes Lines, Italia Line and TMM Lines. CP Ships
principally serves the TransAtlantic, Australasia, Latin America and Asia
markets. Shares of CP Ships also trade on the Toronto Stock Exchange.
Closing Closing Closing Closing Closing
2001 Price 2002 Price 2003 Price 2004 Price 2005 Price
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
January * January 10.75 January 12.54 January 18.33 January 13.48
February * February 11.00 February 12.50 February 18.23 February 13.80
March * March 12.02 March 12.78 March 17.09
April * April 10.15 April 14.55 April 15.55
May * May 11.20 May 15.12 May 18.11
June * June 10.20 June 16.73 June 17.82
July * July 10.97 July 18.49 July 16.65
August 11.32 August 10.86 August 20.77 August 11.68
September 7.73 September 11.45 September 21.05 September 12.24
October 9.61 October 12.01 October 18.93 October 12.54
November 9.40 November 12.60 November 18.92 November 13.27
December 10.86 December 13.58 December 20.77 December 14.35
The closing price on March 1, 2005, was US$13.80.
A-4
FAIRMONT HOTELS & RESORTS INC. (FHR)
Fairmont Hotels & Resorts Inc. manages a portfolio of luxury and first
class hotels and resorts through its two subsidiaries Fairmont Hotels Inc. and
Delta Hotels Limited. The properties are located in Canada, the United States,
Mexico, Bermuda, Barbados and the United Arab Emirates. Notable hotels managed
by Fairmont Hotels & Resorts include The Plaza in New York City, The Fairmont
San Francisco and The Fairmont Banff Springs. Shares of Fairmont also trade on
the Toronto Stock Exchange.
Closing Closing Closing Closing Closing
2001 Price 2002 Price 2003 Price 2004 Price 2005 Price
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
January * January 23.74 January 22.07 January 25.65 January 31.23
February * February 25.49 February 20.66 February 25.63 February 32.14
March * March 28.30 March 22.50 March 25.15
April * April 28.50 April 22.92 April 24.70
May * May 28.00 May 23.60 May 24.61
June * June 25.78 June 23.40 June 26.95
July * July 24.05 July 25.20 July 25.75
August 23.12 August 24.15 August 26.55 August 26.99
September 15.23 September 23.80 September 25.75 September 27.32
October 17.85 October 24.56 October 25.74 October 28.38
November 21.35 November 24.60 November 27.55 November 31.02
December 23.90 December 23.55 December 27.14 December 34.64
The closing price on March 1, 2005, was US$33.10.
A-5
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================================================================================
HOLding Company Depositary ReceiptS(SM)
For Shares of Common Stock of
the Successor Companies to Canadian Pacific Limited
CP HOLDRS(SM)
________________
PROSPECTUS
________________
Merrill Lynch & Co.
March 23, 2005
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers.
Under the Canada Business Corporations Act, Merrill Lynch Canada Inc.
may indemnify a present or former director or officer or a person who acts or
acted at Merrill Lynch Canada Inc.'s request as a director or officer of another
corporation of which Merrill Lynch Canada Inc. is or was a shareholder or
creditor and his heirs and legal representatives against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
reasonably incurred by him in respect of any civil, criminal or administrative
action or proceeding to which he is made a party by reason of being or having
been such a director or officer if the director or officer acted honestly and in
good faith with a view to the best interests of Merrill Lynch Canada Inc., and,
in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, had reasonable grounds for believing that his
conduct was lawful. Such indemnification may be made in connection with a
derivative action only with court approval. A director or officer is entitled to
indemnification from Merrill Lynch Canada Inc. as a matter of right if he was
substantially successful on the merits and fulfilled the conditions set forth
above.
Subject to the limitations contained in the Canada Business
Corporations Act, but without limit to the right of Merrill Lynch Canada Inc. to
indemnify any person under the Act or otherwise, the by-laws of Merrill Lynch
Canada Inc. provide that Merrill Lynch Canada Inc. shall indemnify a Director or
Officer, a former Director or Officer, or a person who acts or acted at Merrill
Lynch Canada Inc.'s request as a director or officer of a body corporate of
which Merrill Lynch Canada Inc. is or was a shareholder or creditor, and his
heirs and legal representatives, against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, reasonably
incurred by him in respect of any civil, criminal or administrative action or
proceeding to which he is made a party by reason of being or having been a
Director or Officer or a director or officer of such body corporate, if he acted
honestly and in good faith with a view to the best interest of Merrill Lynch
Canada Inc. and in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for believing
that this conduct was lawful. The directors and officers of Merrill Lynch Canada
Inc. are insured under policies of insurance maintained by Merrill Lynch Canada
Inc., subject to the limits of the policies, against certain losses arising from
any claim made against them by reason of being or having had been such directors
or officers. In addition, Merrill Lynch Canada has entered into contracts with
all of its directors providing for indemnification of such persons by Merrill
Lynch Canada Inc. to the full extent authorized or permitted by law, subject to
certain limited exceptions.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Merrill
Lynch Canada Inc. pursuant to the foregoing provisions, Merrill Lynch Canada
Inc. has been informed that in the opinion of the U.S. Securities and Exchange
Commission such indemnification is against public policy in the United States as
expressed in the Securities Act of 1933 and is therefore unenforceable.
Item 8. Exhibits.
See Exhibit Index.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
II-1
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of the prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(5) For purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(6) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to Item 15 of this
registration statement, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant hereby certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form F-1 and has duly caused this
Post-Effective Amendment No. 3 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Toronto, Canada on
March 23, 2005.
MERRILL LYNCH CANADA INC.
By: /s/ Ronald S. Lloyd
-----------------------------
Ronald S. Lloyd
President, Chief Operating
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 3 to the Registration Statement has been signed by
the following persons in the capacities indicated on March 23, 2005.
Signature Title
--------- -----
* President, Chief Operating Officer
--------------------------------
Ronald S. Lloyd
* Chief Administrative Officer &
-------------------------------- Chief Financial Officer
Keith Pearson
* Executive Vice President
--------------------------------
Gerald C. Throop
* Chief Legal Counsel
--------------------------------
Marcelo Cosma
*By: /s/ Ronald S. Lloyd Attorney-in-Fact
--------------------------------
Ronald S. Lloyd
II-3
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 3 to the Registration Statement has been signed by
the following person in the capacity indicated and on March 23, 2005.
Name Title
---- -----
Merrill Lynch, Pierce, Fenner & Smith Authorized Representative in the
Incorporated United States
By: /s/ Satyanarayan R. Chada
-------------------------------
Name: Satyanarayan R. Chada
Title: First Vice President
II-4
INDEX TO EXHIBITS
Exhibits
- --------
*4.1 Standard Terms for Depositary Trust Agreements between Merrill
Lynch, Pierce, Fenner & Smith Incorporated and The Bank of New York, as
Trustee dated as of September 2, 1999, and included as exhibits
thereto, form of Depositary Trust Agreement and form of HOLDRS
*5.1 Opinion of Shearman & Sterling LLP regarding the validity of the CP
HOLDRS Receipts
*8.1 Opinion of Shearman & Sterling LLP, as special U.S. tax counsel,
regarding the material federal income tax consequences
*24.1 Power of Attorney
*24.2 Power of Attorney of Pearson and Cosma
_____________________________
*Previously filed